Tesla's long term stock performance is extremely impressive. The stock is up nearly 1,200 percent since the end of 2010 compared to the market's roughly 100 percent return in the same time period.

Morgan Creek's founder and chief investment officer Mark Yusko thinks the expectations built in to Tesla's high valuation will lead to disappointing future returns for the company's shareholders.

"Every month that passes without significant deliveries of the Model 3 will shine the lights on Tesla and force stockholders to check under the hood and they may be distressed to find a cash incineration engine," Yusko, whose firm manages $1.8 billion, wrote in an email.

Tesla shares have crushed the market's performance for years, but patience is starting to run thin among some investors after Chairman and CEO Elon Musk's too ambitious Model 3 production goals.

In the third quarter, Tesla delivered 26,150 total vehicles and just 220 Model 3 cars versus Wall Street analyst consensus estimates for 25,860 and 1,260, respectively, according to FactSet. The Model 3 delivery miss revealed on Oct. 3 came just two months after the company gave guidance of more than 1,500 vehicles for the quarter.

"We are confident we can produce just over 1,500 vehicles in Q3, and achieve a run rate of 5,000 vehicles per week by the end of 2017. We also continue to plan on increasing Model 3 production to 10,000 vehicles per week at some point in 2018," Tesla said in its second-quarter 2017 update letter on Aug. 2.

Tesla shares fell 4 percent Monday after The Wall Street Journal reported Friday that the company was building "major portions" of the Model 3 car by hand away from the automated production line as of early September, according to people familiar with the matter.

"Frequent wide-of-the-mark forecasts..."

Even though the company called the report "fundamentally wrong and misleading" investors are saying any further stock price decline may be a sign sentiment is finally shifting on the Street.

"Tesla's stock has been egregiously overvalued for years. However, up until now, the stock market invince-a-bulls have been able to ignore all bad news - not just Elon Musk's frequent wide-of-the-mark forecasts," Fred Hickey, editor of High Tech Strategist, wrote in an email. "Therefore, if Tesla's sharp Monday decline continues, it could tell us as much about how much gas is left in the bull market's tank as it does about how much rope Musk has remaining."

Hickey owns long-term Tesla put options.

Wall Street is also noticing the sheer magnitude of Tesla's cash burn. Bernstein analyst Toni Sacconaghi estimated Tesla will burn through $4.7 billion of cash this year in a note to clients on Sept. 27. He said the company will reach a total $10.6 billion of cash burn as a public company by the end of 2017, which is unprecedented for a nearly $60 billion market-cap company.

In comparison, he cited how Amazon burned $1.1 billion of cash over three years and was generating billions of dollars of cash when it reached a $60 billion valuation.

"Cash incineration engine..."

One hedge fund manager is noticing Tesla's large investment spending and doubts it will bear fruit.

"There is no question that Tesla makes a good luxury car, there is some question about whether Tesla is a well run company, given the production delays and huge cash burn and there are serious questions about whether holders of the stock at these levels could ever make a positive return," Morgan Creek Capital's founder and chief investment officer Mark Yusko, whose firm manages $1.8 billion, wrote in an email. "Every month that passes without significant deliveries of the Model 3 will shine the lights on Tesla and force stockholders to check under the hood and they may be distressed to find a cash incineration engine."

The company's shares are outperforming the market this year, up more than 60 percent. Tesla's long-term performance is even more impressive. The stock is up nearly 1,200 percent since the end of 2010 compared with the market's roughly 100 percent return in the same time period.

After the stunning stock move, it is now valued at a much higher price-to-sales multiple than many of its automaker peers.

Morgan Creek's fund manager thinks the expectations built in to Tesla's high valuation will lead to disappointing future returns for the company's shareholders.

"To own Tesla stock at these valuations, one must believe that a company that has never hit an earnings milestone in its history can suddenly solve their production problems, solve their technology scaling challenges, stem their massive cash burn rate and hope that no other luxury car maker ever offers a competing EV," Yusko said. "We are fond of saying that Hope is not an investment strategy, it is a four letter word and it appears that time may be running out for the Teslarians."

But one Wall Street analyst believes it is too early to give up on Elon Musk's vision yet.

"I think that as long as fear is absent from the market, the market will mostly look the other way on [Q3 delivery] misses like this because there is a lot of faith that Tesla will be far bigger in time than it is today," Morningstar's auto analyst David Whiston wrote in an email.

"Whether the Model 3 line gets going full speed in 2017 or early 2018 doesn't matter much in the long-run. A more serious issue would be a delay impacting large volume of Model 3 deliveries for several quarters, or even a year, but there's no evidence to suggest that is a real risk right now."

Tesla did not respond to a request for comment.

Disclosures: Yusko's firm manages a fund of hedge funds and also does direct and private investments.

"We have an underlying manager in our main Fund who is long and we have a small synthetic [Tesla] short (using options) to offset," he said.